This bill clarifies the proper section of law to find the definition of "divisive concepts" as it pertains to higher education regulation. This bill also amends the Tennessee Higher Education Freedom of Expression and Transparency Act, as described below.
NO RETALIATION FOR REFUSING TO ENDORSE DIVISIVE CONCEPTS
Under present law, a student or employee of a public institution of higher education ("institution") must not be penalized, discriminated against, or receive any adverse treatment due to the student's or employee's refusal to support, believe, endorse, embrace, confess, act upon, or otherwise assent to one or more divisive concepts, nor must a student or employee of an institution be required to endorse a specific ideology or political viewpoint to be eligible for hiring, tenure, promotion, or graduation; nor may institutions ask the ideological or political viewpoint of a student, job applicant, job candidate, or candidate for promotion or tenure. Further, an institution must not require an applicant for employment or admission to submit a personal diversity statement or to affirm the applicant's agreement with an institutional diversity statement as part of the application or admissions process. This bill keeps intact the prohibition against an institution in this state retaliating against students and employees for failing to endorse divisive concepts, and expands upon it as described below.
REPORTING A VIOLATION
Under present law, if an institution violates the law by retaliating against a student or employee for failing to endorse divisive concepts, a student or employee of the institution may file a report with the institution. This bill adds that an institution must initiate an investigation into each report filed with the institution alleging an institution's violation no later than five days immediately following the date on which the report was filed, and must complete the investigation no later than 30 days immediately following the date on which the report was filed.
Each institution is further required under this bill to report the results of each investigation to the comptroller of the treasury no later than 10 days after the investigation is completed. The report must describe the general nature of the complaint, state whether the allegations in the complaint were substantiated by the institution's investigation, and detail the corrective actions the institution is taking to prevent such violations in the future. A report submitted to the comptroller must be redacted if necessary to ensure compliance with the federal Family Educational Rights and Privacy Act; state confidential records laws; and all other relevant privacy laws. If an institution needs additional time to complete its investigation, then the institution may request that the comptroller grant the institution an extension of the 30-day period, as long as the comptroller does not grant an institution an extension that exceeds 60 days.
WITHHOLDING STATE FUNDS FOR VIOLATIONS
If the comptroller finds that an institution has failed to timely investigate a report alleging the institution's violation under this bill, has failed to timely report the results of an investigation to the comptroller, or has failed to take the corrective actions reported to the comptroller, then the comptroller may direct the department of finance and administration to withhold state funds from the institution, in either the current or upcoming academic year, in the following amounts:
(1) For a second violation of this bill committed by the institution in one academic year, 2 percent of the annual state funds generated by the institution in the outcomes-based funding formula;
(2) For a third violation of this bill committed by the institution in one academic year, 4 percent of the annual state funds generated by the institution in the outcomes-based funding formula;
(3) For a fourth violation of this bill committed by the institution in one academic year, 6 percent of the annual state funds generated by the institution in the outcomes-based funding formula;
(4) For a fifth violation of this bill committed by the institution in one academic year, 8 percent of the annual state funds generated by the institution in the outcomes-based funding formula; and
(5) For a sixth violation of this bill committed by the institution in one academic year, 10 percent of the annual state funds generated by the institution in the outcomes-based funding formula.
If funds are withheld pursuant to this bill, then the funds must be withheld until the institution has remedied the violation by reporting the results of the institution's completed investigation, or by providing sufficient evidence, as determined by the comptroller, of the institution's implementation of the necessary corrective actions. The percentage of any funds withheld must be calculated by the department based on the amount of state funds generated by the institution in the outcomes-based funding formula for the previous academic year.
MULTIPLE REPORTS PROTOCOL, AND EQUITABLE AND LEGAL REMEDIES
If the comptroller receives more than 10 reports from an institution in any one academic year pursuant to this bill, then the comptroller is required to report the same to the education committee of the senate and the education administration committee of the house of representatives. An individual is not required to file a report with the institution pursuant to this bill before the individual may pursue any equitable or legal remedies that may be available to the individual in a court of competent jurisdiction.
ON APRIL 1, 2024, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 2501, AS AMENDED.
AMENDMENT #1 makes the following changes to the bill:
(1) Revises the provisions in the bill requiring an institution to initiate an investigation into each report filed with the institution alleging an institution's violation no later than five days immediately following the date on which the report was filed, and must complete the investigation no later than 30 days immediately following the date on which the report was filed by, instead, requiring an institution to investigate a report filed in a timely manner and to take the appropriate steps to correct any violation that is found to have occurred;
(2) Deletes the provision in the bill providing that if an institution needs additional time to complete its investigation, then the institution may request that the comptroller grant the institution an extension of the 30-day period, as long as the comptroller does not grant an institution an extension that exceeds 60 days and, instead, requires an institution to update the comptroller no less than once every 30 days as to the status of an investigation being conducted by the institution regarding a report alleging a violation;
(3) Deletes the provisions in the bill authorizing the comptroller to direct the department of finance and administration to withhold state funds from the institution, in either the current or upcoming academic year, for violations;
(4) Adds that if the comptroller finds that an institution has failed to timely investigate a report alleging a violation, has failed to timely report the results of an investigation to the comptroller, or has failed to take the corrective actions reported to the comptroller, then the comptroller must notify the institution and the joint government operations committee in writing of the institution's noncompliance, and the respective institution must appear before the joint government operations committee no later than 60 days from the date of the comptroller's written notice to report on the institution's noncompliance;
(5) Deletes the provisions in the bill providing that if funds are withheld pursuant to (3) above, then the funds must be withheld until the institution has remedied the violation by reporting the results of the institution's completed investigation, or by providing sufficient evidence, as determined by the comptroller, of the institution's implementation of the necessary corrective actions. The percentage of any funds withheld pursuant to (3) above must be calculated by the department based on the amount of state funds generated by the institution in the outcomes-based funding formula for the previous academic year;
(6) Clarifies that if the comptroller receives more than 10 reports from an institution in any one academic year that each independently allege a separate and distinct violation, then the comptroller must report the same to the education committee of the senate and the education administration committee of the house of representatives; and
(7) Changes the effective date to July 1, 2024.

Statutes affected:
Introduced: 49-7-1904(d)(1), 49-7-1904, 49-7-1907